Total Quality Management

Prof Shivashankar For MBA

Some questions . . .
Does higher quality has any relation with business performance? Does higher quality means more cost and more time Or quality is free? Operational problems faced by organizations can be generalized? What management experts have advised to improve aver all operation?

Shall we learn lesson from management experts or try our own methods
Total Quality Management

Contents
Quality Definition

Quality Movements
History of Quality Paradigms Quality Control & Assurance

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- Pillars of TQM - Other components of TQM
Quality is never an accident; it is always the result of high intention, sincere effort, intelligent direction and skillful execution; it represents the wise choice of many alternatives. Will A Foster
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Quality Definition
Quality is the conformance requirements. (Crosby in 1979)
Fitness for use. (Juran 1970) The degree to which a system, component, or process meets specified requirements. (IEEE)

to

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Quality Gurus

Walter A. Shewhrat Dr. W. Edwards Deming Dr. Joseph M. Juran Philip Crosby Kaoru Ishikawa

(Father of Quality, 1920-1940s)

(14-points, 1945-1980s) (TQM, post WWII 1980s) (Quality is Free, 1980s) (Fish Bone, SPC, post WWII - 1980s)

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Quality Movements
Japanese were badly defeated in World War II. Their industrial and financial bases were in chaos. Japan had no natural resource and limited source of food for their people. The quality movement began in Japan in 1946 with the U.S. Occupation Force's mission to revive and restructure Japan's communications equipment industry. Dr. Deming was invited by the Union of Japanese Scientists and Engineers to Japan in 1947. In 1954, Dr. Joseph Juran of the United States raised the level of quality management from the factory to the total organization in Japan.
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Quality Movements
Results from Japans implementation from American

quality experts led to an industrial revolution that

eventually left the American industry lagging behind. It was during the late 1980s that American industry began

to finally look to their quality experts for methods to

improve quality. In the late 1980s, an NBC documentary called If Japan Can

Why Cant We brought national attention to the needs for

quality improvements for global competition.

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History of Quality Paradigms

1- Customer-Craft quality Paradigm
Design and build each product for a particular customer. Producer knows the customer directly.

2- Mass production & inspection Paradigm

Focus on designing and building products for mass consumption.
- Push products on the customer
(limit customer choices).

- Quality is maintained by inspecting and detecting bad products.

Major innovation to this paradigm: statistical process control

3- TQM Paradigm
Potential customers determine what to design and build. Higher quality obtained by focusing on preventing defects and continuously reducing variability in all processes.
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Quality Evolution
Proactive Approach
Prevention Stop defects at source. Zero defects
3
4

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Incorporates QC/QA activities into a company-wide system aimed at satisfying the customer. (involves all organizational functions)

Quality Assurance

Planned and systematic actions to insure that products or services conform to company requirements

Reactive Approach
Detection Finding & Fixing mistakes
1 2

Quality Control

Operational techniques to make inspection more efficient & to reduce the costs of quality. (example: SPC) Inspect products

Inspection

Quality Control
The purpose of quality control is to uncover defects and have them corrected so that defectfree products will be produced. Quality control is limited to looking at products . Quality control is testing the final product against product quality standards. Quality control is operational techniques that are used to fulfill requirements for product quality.
Juran says, software quality control is the process of measuring actual quality, comparing this to some standard, and then acting on the discrepancy.
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Quality Assurance
Quality assurance is oriented toward preventing defects. It is defined by those activities that modify the development processes to prevent the introduction of defects. Quality assurance is more concerned with the processes that produce the final product, and making sure that quality is part of each phase. QA is about maturing the process towards minimum defect. It is about balancing methodology, leadership, and technology. It is about taking into account human factors as well as technological ones.
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TQM Philosophy
Philosophy of TQM revolves around customer driven management. Its major emphasis is on determining customer need or expectation from the product.

Total Quality is the culture of the organization.

It is attitude of people how they perform their assigned work with aims to provide, customers with products and services that satisfy their needs. The culture change means all members of the organization participate in the improvement of process, products, and services.
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TQM Philosophy

Do the right things, right the first time, every time

You must put a quality product into QC before you can expect to get out one, otherwise wastage (or rework) will be very high.

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Pillars of TQM

1- Customer Focus: Studying customer needs, gathering customer requirements, and measuring and managing customer satisfaction. Customer satisfaction is seen as the company's highest priority. The company believes that it will only be successful if its customers are satisfied. 2- Process Management: Develop a production process that reduce the product variations. Applying the same process; the same product should be produces with the same level of quality every time. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management's focus is on controlling the overall process, and rewarding teamwork.
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Pillars of TQM

3- Human side of Quality: TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities.
On-going education and training of all employees supports the drive for quality. 4- Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes.

This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality. Measurement and analysis id the tool that has been used for that.

Pillars of TQM

T. Q. M.
Customer Focus Process Employee Training Management & Empowerment Continuous Improvement
(through measurement and analysis)

Reduce rework activities Shorter development cycle Increased customer satisfaction

(Cost reduction) (Cost reduction) (Quality improvement)

Other elements of TQM

Leadership

Vision and Plan Statement

Employee Participation Recognition and Reward Education and Training Supplier Quality Management Performance Evaluation Product Design

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Leadership
The ability of top management to establish, practice, and lead a long-term vision for the firm, driven by changing customer requirements, as opposed to an internal management control role. Lack of top management commitment is one of the reasons for the failure of TQM efforts (Brown et al. 1994).

A predominant requirement for quality management is that strong commitment from top management is vital.
To be an effective leader in most modern firms, the top manager must continue to develop and learn. Knowledge of the business and continual learning are essential prerequisites to effective leadership (DuBrin, 1995).
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Leadership
In order to effectively lead the firm, top management must be committed to provide education and training to employees and regarding them as valuable resources of the firm. Top management must be committed to allocating sufficient resources to prevent, as well as repair, quality problems. Top management should discuss quality frequently; by having session on the topic and asking questions about quality at every staff meeting.

Top management must train and coach employees to assess, analyze, and improve work processes (Deming, 1986).

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Vision & Plan Statement

Vision statement describes how a firm wants to be seen in its chosen business. Vision describes standards, values, and beliefs of the organization. Intent of a vision statement is to communicate the firms values, aspirations and purpose, so that employees can make decisions that are consistent with and supportive of these objectives. Plan statement is a detailed road map of actions; what and how organization intended execute that plan in future. Organization may have many kinds of plan; - Strategic business performance plan - Quality goal plan - Quality improvement plan

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Vision & Plan Statement

Strategic business performance plan can be divided into long- and short-term business performance plans that include, for example, market share, profits, annual sales, exports, and sales growth. Quality goal plan can involve, for example, conformity rate, defect rate, internal failure costs, external failure costs, performance, reliability, and durability. Quality improvement plan aims for quality improvement, which are actions taken throughout the organization to increase the effectiveness and efficiency of activities and processes in order to provide added benefits to both the organization and its customers (ISO 8402, 1994).

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Employee Participation
Employee participation can be defined as the degree to which employees in a firm engage in various quality management activities. By participating in quality management activities, employees acquire new knowledge, see the benefits of the quality disciplines, and obtain a sense of accomplishment by solving quality problems. A remarkable characteristic of employee participation is teamwork. Breakdown barriers between departments. People in research, design, sales, and production must work as a team (Demings 9th point). If several knowledgeable people are brought into the decision-making process, a number of worthwhile possibilities may be uncovered.
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Employee Participation
TQM implementation practice is formation of short-term problem-solving teams. Problem-solving teams work on a wide variety of tasks, ranging from cross-functional involvement in tackling quality problems to solving within-functional quality problems. TQM firms create employee suggestion systems. Production workers should regularly participate in operational decisions such as planning, goal setting, and monitoring of performance. They are encouraged to make suggestions and take a relatively high degree of responsibility for overall performance. Employees should be encouraged to inform managers or supervisors concerning conditions that need correction (e.g., process defects, incompetent staff and poor tools).
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Recognition & Reward

Recognition is defined as the public acknowledgment of superior performance of specific activities.

Reward is defined as benefits, such as increased salary, bonuses and promotion, which are conferred for generally superior performance with respect to goals (Juran and Gryna, 1993). Public recognition is an important source of human motivation.
Important feature of any quality improvement program is the showing of due recognition for improved performance by any individual, section, department or division within the firm.

A large majority of firms implementing TQM modify their performance measurement and reward systems so that achievement of specific quality goals can be assessed and rewarded.
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Education & Training

Training programs attempt to teach employees how to perform particular activities or a specific job. Institute a vigorous program of education and selfimprovement (Demings 13th point). According to Deming, Japanese firms obviously regard their employees as their most significant competitive assets and provide good general orientation as well as training in specific skills. According to Feigenbaum, a brief and general course for first-line supervision is modern methods of planning and controlling quality, concentrating essentially upon the physical elements affecting product quality.

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Performance Evaluation
Evaluation can identify the difference between actual and the expected performance. Evaluation information should be communicated to employees in order to encourage employees to make things better. Uncontrolled variance in processes or outcomes is the primary cause of quality problems and must be evaluated and controlled by those who perform the firms front-line work.

It is important to note that the major aim of evaluation is improvement, NOT criticism.
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Product Design (SW Dvmt)

Product design translates customer expectations or requirements into specific engineering and quality characteristics, which can be called specifications. It is an important practice for design engineers to have some marketing knowledge, making it easier for them to understand customer needs, expectations, and future requirements. Different departments in a firm should participate in new product design. Before production, new product design should be thoroughly reviewed in order to avoid problems during production.

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Good Managers (Leaders)

1. 2. 3. 4. 5. 6. Give priority attention to customers and their needs Empower, rather than control, subordinates. Emphasize improvement rather than maintenance. They emphasize prevention. Encourage collaboration rather than competition. They train and coach, rather than direct and supervise.

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Good Managers (Leaders)

7. 8. 9.

Learn from problems. They continually try to improve communications. They continually demonstrate their commitment to quality. 10. Choose suppliers on the basis of quality, not price. 11. Establish organizational systems to support the quality effort. 12. Encourage and recognize team effort.

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Understand People
People,normally, need security and independence at the same time. People are sensitive to rewards and punishments and yet are also strongly self-motivated.

People like to hear a kind word of appreciation.

People can process only a few facts at a time; thus, a leader needs to keep things simple.

People trust their gut reaction more than statistical data.

People dont trust a leader (or boss) if the words are inconsistent with the his/her actions.
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Old vs. TQM Approach

Quality Element Previous Approach TQM Approach

Definition
Priorities

Product-oriented
2nd to service and cost

Customer-oriented
Equals of service and cost Long-term Prevention System Everyone Teams Life-cycle costs,partnership Delegate, coach, facilitate and mentor

Decisions
Emphasis Errors Responsibility Problem Solving Procurement Managers Role

Short-term
Detection Operations Quality control Managers Price Plan, assign, control, and enforce

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CoQ vs Performance Improvement

10

Software Quality

Cost of Quality Business Performance

5

Improvement Multiplier

Years

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